F21 OpCo, LLC, the operator of Forever 21 stores and the licensee of the Forever 21 brand in the United States, has announced that it, along with certain US subsidiaries, has entered into a Plan Support Agreement (PSA) with its secured lenders and has voluntarily filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware.
F21 OpCo, LLC, the operator of Forever 21 stores in the US, has filed for Chapter 11 bankruptcy in Delaware.
The company plans an orderly wind down while exploring potential asset sales.
Stores and the website will remain open during proceedings.
International locations are unaffected.
Legal and financial advisors have been engaged to navigate restructuring and potential sales.
Through this process, the Company aims to conduct an orderly wind down of its US operations while simultaneously exploring potential transactions, including a possible sale of some or all of its assets, as per a release by F21 OpCo.
As part of the bankruptcy process, F21 OpCo will undertake liquidation sales at its stores while also initiating a court-supervised marketing process for its assets. The Company will file a motion with the Court seeking approval to market its assets through an auction under section 363 of the US Bankruptcy Code. If a successful sale is secured, the Company may shift away from a full wind down and instead facilitate a going-concern transaction. This dual-track approach is aimed at maximising value and optionality for the Company.
Despite the bankruptcy filing, Forever 21 stores and the US website will remain open and continue operations while the wind-down process begins. The Company has also filed customary first-day motions with the Court to seek approval for the consensual use of cash collateral. These motions aim to ensure the continuation of employee wage payments and benefits throughout the Chapter 11 process.
Forever 21 locations outside the United States, which are operated by independent licensees, are not included in these bankruptcy proceedings. Authentic Brands Group remains the owner of Forever 21’s intellectual property and may license the brand to other operators in the future. International stores and Forever 21’s global e-commerce platforms will continue their usual operations.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young Conaway Stargatt & Taylor, LLP are serving as the Company’s legal counsel, while BRG has been appointed as its financial advisor. RCS Real Estate Advisors is assisting with real estate matters, SSG Capital Advisors, LLC is handling investment banking services, and Reevemark is providing communications advisory support.
This development marks a significant shift for the well-known fashion retailer, which has faced mounting challenges in the competitive fast-fashion industry. The outcome of the bankruptcy proceedings will determine the future of Forever 21’s US presence.
Fibre2Fashion News Desk (HU)
